SAMPLE EXAM - DECA

1 SAMPLEEXAMPERSONAL FINANCIAL LITERACYTHE PERSONAL FINANCIAL LITERACY EXAM IS USED FOR THE FOLLOWING EVENT:PERSONAL FINANCIAL LITERACY PFLT hese test questions were developed by the MBA Research Center. Items have been randomly selected from the MBA Research Center s Test-Item Bank and represent a variety of instructional areas. Performance indicators for these test questions are at the prerequisite, career-sustaining, and specialist levels. A descriptive test key, including question sources and answer rationale, has been 2019 by MBA Research and Curriculum Center , Columbus, Ohio. Each individual test item contained herein is the exclusive property of MBA Research Center.

2 Items are licensed only for use as configured within this exam, in its entirety. Use of individual items for any purpose other than as specifically authorized in writing by MBA Research Center is online March 2019 by deca 1187 PERSONAL FINANCIAL LITERACY 1 Copyright 2019 by MBA Research and Curriculum Center , Columbus, Ohio 1. Margo signed a lease to rent a small building for her business. In exchange for the use of the facility, Margo will pay monthly rent. What component of a legally binding contract does the rent represent?

3 A. Competent parties B. Consideration C. Legality D. Agreement 2. An offer must be made by one party and accepted by the other party in order for a contract to be A. put in written form. B. notarized. C. legally binding. D. interpreted correctly. 3. Which of the following is an example of involuntary debt: A. Unsecured line of credit B. Automobile loan C. Fixed-rate mortgage D. Court judgment lien 4. A "spoof," or a fake email that appears real, is part of what investment scam? A. Pump and dump B. A pyramid scheme C. Affinity fraud D.

4 Phishing 5. Which of the following is an example of a regulation that protects investors: A. Brokerage firms are required to abide by equal opportunity employment laws. B. Individuals are not allowed to purchase and sell more than five stocks per week. C. Companies must honestly and publicly disclose their business information. D. Newspapers and magazines are not allowed to report on stock market trends. 6. When providing services to clients, financial professionals have the responsibility to supply A. accurate information. B. payment options. C. credit counseling.

5 D. bank statements. 7. What should you do if a financial client reports a problem with her/his portfolio? A. Call the client back later after s/he has calmed down. B. Apologize and resolve the problem immediately. C. Ask the manager to return the client's call. D. Waive the client's fees for his/her next five transactions. 8. Which of the following is typically an effective method to build trusting relationships with financial clients: A. Contacting clients only when problems arise with their accounts B. Using precise technical language when explaining financial products C.

6 Asking others in the organization to follow up after sales transactions D. Explaining the benefits and drawbacks of different financial products 9. The inputs that allow businesses to operate are called economic A. incentives. B. services. C. models. D. resources. Test 1187 PERSONAL FINANCIAL LITERACY 2 10. One of the main reasons why individuals make investments based on their future financial needs is to A. develop a living will. B. avoid paying taxes. C. set up a trust fund.

7 D. generate retirement income. 11. What economic activity examines how money payments are divided between resource owners and producers? A. Production B. Consumption C. Exchange D. Distribution 12. John gets up, dresses, brushes his teeth, eats breakfast, goes to school, buys gum at the school store, and reports to his first class. Which of these would be considered an economic activity? A. Brushing teeth B. Eating breakfast C. Buying gum D. Going to class 13. The main reason people are willing to face possible business risks is A. jobs. B. profit. C.

8 Power. D. security. 14. Some businesses are able to avoid potential risks by taking actions to _____ them. A. eliminate B. overlook C. examine D. disregard 15. When a nation's inflation rate is low, what do prices tend to do? A. Fluctuate daily B. Increase dramatically C. Remain stable D. Reduce currency values 16. Which of the following statements is true about inflation: A. It increases when the money supply decreases. B. It has little effect on consumers' ability to save. C. It is usually caused by a supply surplus. D. It decreases the value of money.

9 17. When two parties work together to negotiate a result that is mutually beneficial, it is called a _____ outcome. A. lose-lose B. win-lose C. win-win D. lose-win 18. Which of the following is a disadvantage of using cash as a form of financial exchange: A. The risk of theft decreases. B. Cash payments often incur fees. C. There is a higher risk of fraud. D. It is easy to steal or lose. Test 1187 PERSONAL FINANCIAL LITERACY 3 19. Which of the following is a name for a medium of exchange accepted and backed by the government as payment for goods and services: A.

10 Currency B. Credit cards C. Money market accounts D. Certificates of deposit 20. Marshall's employer pays him for the work that he performs while on the job. This is an example of A. passive revenue. B. earned income. C. capital gains. D. transfer payments. 21. What is a primary consideration when evaluating the time value of money? A. Tariffs B. Premiums C. Credit limit D. Interest rate 22. The arrangement by which businesses or individuals can purchase now and pay later is known as A. credit. B. capacity. C. interest. D. collateral.